Macronix International Co (旺宏電子) yesterday said that stronger-than-expected demand for memory chips from its top client, Nintendo Co, and other new products would fuel growth momentum in the second half of this year, shrugging off the effects of the US-China trade row.
US trade sanctions on Huawei Technologies Co (華為) would barely dent the chipmaker’s shipments to the Chinese company, Macronix said.
The US ban has taken a toll on Huawei, causing its smartphone sales to drop 40 percent over the past month and could cut its revenue by US$30 billion in the next two years, Huawei founder Ren Zhengfei (任正非) told a panel discussion in Shenzhen, China, on Monday.
“Fortunately, we produce very few memory chips for mobile phones,” Macronix chairman Miin Wu (吳敏求) told reporters on the sidelines of the company’s annual general meeting, implying limited impact from the Huawei ban.
While Huawei is one of the Hsinchu-based chipmaker’s top three clients, it accounts for less than 10 percent of its revenue, Wu said.
Macronix primarily supplies NOR flash memory chips used in Huawei’s 5G base stations, he said.
As global trade becomes chaotic due to the trade spat, Macronix is more cautious about the outlook for the second half, Wu said.
“It is certain that the second half would be better than the first half. However, we are not so sure how robust the strength would be,” Wu said, referring to the trade dispute, which has shaken global business confidence and reduced Macronix’s order visibility.
Two months ago, Wu anticipated that the dispute would be over by the end of this month.
However, now, the chances of the world’s two biggest economies resolving the dispute looks slim, he said.
“As uncertainty is high, clients tend to place short-term orders, rather than long-term ones. That makes it difficult for us to make forecasts,” Wu said.
However, orders from long-term client Nintendo “has exceeded our expectations in the past two months,” he said. “Demand is better than we thought.”
Nintendo’s strong demand for ROM memory chips helped boost Macronix’s revenue to NT$2.72 billion (US$86.27 million) last month, up 30 percent from April.
“That is very unusual, as the first and second quarters are usually slow seasons,” Wu said.
To further fuel growth, Macronix plans to mass produce advanced 19-nanometer NAND flash memory chips in the fourth quarter, he said.
The chipmaker has budgeted NT$14.2 billion for new facilities and equipment this year, mostly for 19-nanometer technology.
Shareholders approved a plan to distribute a cash dividend of NT$1.2 per share, representing a 40.49 percent payout ratio based on earnings per share of NT$4.94 last year. That implies a dividend yield of 5.57 percent, based on the stock’s closing price of NT$21.55 yesterday.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
A German company is putting used electric vehicle batteries to new use by stacking them into fridge-size units that homes and businesses can use to store their excess solar and wind energy. This week, the company Voltfang — which means “catching volts” — opened its first industrial site in Aachen, Germany, near the Belgian and Dutch borders. With about 100 staff, Voltfang says it is the biggest facility of its kind in Europe in the budding sector of refurbishing lithium-ion batteries. Its CEO David Oudsandji hopes it would help Europe’s biggest economy ween itself off fossil fuels and increasingly rely on climate-friendly renewables. While
RSS